MPA given powers to reject purchase or disposal of stakes in ‘key entities’

The Maritime and Port Authority of Singapore (MPA) has been given the powers to block the purchase or disposal of stakes in key designated entities, if the transaction is deemed to undermine the interests of the port.

Lam Pin Min, senior minister of state for transport, said in his speech in parliament on Monday that the entities include designated public licensees, designated business trusts and designated equity interest holders.

“The port is a strategic national infrastructure. It is not just a facility where we import most of our daily necessities. More importantly, the port provides the global connectivity that drives our economy, helping to fuel the growth of sectors such as logistics, manufacturing and wholesale trade,” Lam said.

“Given the strategic interests at stake, it is important for MPA to have oversight on changes in substantive equity control in licensees that provide essential services at the port. The intent is not to control the day-to-day operations of these licensees, but rather to require MPA’s approval to be sought for transactions in equity interest that would materially change the equity control of these licensees,” he continued.

In describing a bill to amend the MPA of Singapore Act to give effect the powers, Lam highlighted a key provision of the bill being “enhance oversight of shareholders of PSAI (PSA International) and PSAC (PSA Corporation)”.

The senior minister further explained that under the bill, designated entities will be subject to three key controls relating to changes in equity interest in the entities.

“First, any person acquiring interest that would result in the person holding 5% or more of the total interest in a designated entity will be required to notify MPA,” Lam said.

“Second, any person intending to acquire 25% or more, or 50% or more of the total interest in a designated entity, will be required to obtain prior approval from MPA. Third, any person intending to dispose interest that would result in that person's shareholding falling below 75% or 50% of the total interest in a designated entity will be required to obtain prior approval from MPA.”

Activities at the port of Singapore are a major economic contributor to the country. Singapore port is the world’s second busiest container port and the world’s largest bunkering port.

A number of international shipping lines have joint ventures with PSA container terminals, and the port is one of the world’s top five oil trading and refining hubs.

Posted 04 October 2017

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Lee Hong Liang

Asia Correspondent

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